BE130 Current issues in Financial reporting Assignment Help

QUESTION- CASE STUDY

You are a qualified chartered Accountant with Marvin Co. Ltd, a listed company that manufactures and Distributes Premium audio and visual equipment. The financial statements of Marvin are prepared up to 31th December each year in accordance with International Financial Reporting Standards (IFRS).

You encountered the following outstanding issues while preparing the Financial statements for the year ended 31 December 2016.

1. Marvin purchases a customer list from liquidator of a competitor on 1 July 2016. Marvin paid $4millions, which was based on the list having a useful life of two years. The Managing Director, Marcus commissioned a report on the value of customer list from a firm of independent valuers on 31 December 2016.
2. The customer list was valued at $5 million by independent valuer, who also estimated the assets had a total useful life of five years. Currently, the customer list is recorded as a single intangible asset with a carrying value of $4 million. However, Marcus now wants to list to be revalued to the higher amount.

Required

Prepare a justification with reference to relevant IFRS of accounting treatment suggested for each of the issues above, preparing supporting calculation and discussing the impact, where appropriate, on the consolidated statement of comprehensive income and consolidated statement of financial position for Marvin Co. for the year ended 30 December 2016.